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Power Profile: Bill Walton
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– Andrew Harnik/Examiner
WASHINGTON (Map, News) - College came too early for Bill Walton. Because he skipped a grade in elementary school, he entered Indiana University at age 17 — too young, he said, to know what he really wanted to do with his life. After a couple of years, he decided to take a semester off to figure it out.
That was in the early ’70s, and like many young men of his time, Walton was soon drafted. Instead of heading to Vietnam as he had expected, he landed at the Pentagon, where his duties included serving as a records clerk during the My Lai massacre investigation.
Army life focused him, Walton said, and when he got out, he headed home to Indiana and finished his business degree, paying his way with the GI Bill and money from driving a garbage truck and a taxi, bartending, and working as a night auditor at a hotel.
“I was thinking at the time of being a producer, so I came back to Washington after graduation and spent some time in the theater here and in New York, looking into that,” he said. “I was doing a little acting, but increasingly I found myself going to rehearsals and reading economics books. I decided that business is as creative, if not more creative, than the performing arts.”
Today, Walton is chairman, president and chief executive officer of Allied Capital Corp., one of the nation’s leading business development companies. He keeps active in the arts by serving as president of the National Symphony Orchestra’s board of directors.
Allied Capital, which turns 50 this year, has $5.2 billion in assets and has invested in thousands of small and midsized private businesses around the nation. It also has the distinction of being one of about 50 public companies that have paid consistent or increasing regular quarterly cash dividends on an annual basis to shareholders over the long haul — in Allied’s case, since 1963.
The company’s current portfolio includes investments in 120 companies — everything from office cleaners, mousetrap makers, and pancake house franchisors to Meineke car care centers and DHL shippers. The companies generate aggregate annual revenues of more than $13 billion and employ more than 95,000 people.
“If you look at what we do as active investors and entrepreneurs, we organize resources to bring about a desirable end. You’re thinking about what kind of people you want to get involved. You’re thinking about strategy. You’re thinking about how you finance the business. You’re thinking about your customers and how to best serve them,” Walton said. “You know you’ve done a good job if your businesses are thriving; you get direct feedback from the market, and that’s very gratifying when your projects work.”
Larry Hebert, chairman of the board for Dominion Advisory Group and a director on the board of Allied Capital, has worked with Walton for more than a decade. He attributes the company’s success to Walton’s knowledge of the capital markets and his ability to assess risk and diversify Allied Capital’s portfolio.
“He did not get caught up in the high-tech bust. He has not gotten caught up in the real estate problems,” Hebert said. “His timing and his judgment have been excellent.
“He’s a very good strategic thinker, always thinking beyond the present circumstances,” added Hebert, who also worked with Walton on the board of the holding company of Riggs Bank. “Even as a company is moving into a successful phase, he is busily probing in his own mind what needs to be done to address the future.”
Walton said Allied Capital has done so well because it does its homework and invests only in companies whose business it truly understands — mostly in consumer products and business services.
“We’re highly selective,” he said. “Last year, we looked at roughly a hundred billion dollars worth of new investments and invested $2 billion.” It takes the company months to make a decision on an investment after numerous reference checks and poring over the books of prospective partners.
And the company increases its dividend payments only when it believes the payments are sustainable, he added. “We have over 180,000 shareholders — 65 percent are individuals — and many of our shareholders depend on the dividend for income and retirement, so we’re very careful.”
Ron Shapiro, a Baltimore-based sports agent, lawyer and author who represents baseball Hall of Famer Cal Ripken Jr., met Walton by chance while waiting to see someone else at Allied Capital. Walton stepped out of his office to pick up a newspaper from the lobby and Shapiro made a comment about a story in the paper. Walton, he said, stopped to engage him in conversation.
“When he looks at you, you really feel like he is looking into you, that he’s interested in you,” Shapiro said. “He runs his business very effectively, but he also is very interested in other issues in the world and in the community. He can talk about books, art, music, baseball, movies.”
When Shapiro conducted a training seminar for Allied Capital’s staff, Walton not only came in and sat down, but he stayed for two days, Shapiro said. “It was an amazing example of leadership by example, and the people he works with were very responsive to that. They were inspired by him.”
Outside of Allied Capital and his work for the National Symphony Orchestra, Walton also serves on the boards of the U.S. Chamber of Commerce, the Financial Services Roundtable and the human rights watchdog Freedom House. He and his wife, Sarah, an artist, often host their two grown children and their friends at their Kalorama home, which Walton joked has become a bed and breakfast in the past few years as his son, an Army sergeant, has brought his soldier friends home on weekends to enjoy his mother’s cooking.
Walton also reserves at least two hours a day — from 5 to 7 a.m. — to read newspapers. He listens to books on tape on an iPod and carries a traditional book wherever he goes. Reading, he said, is the way he teaches himself — about the world and about his business. One of the things he’s learned, he said, is that “you have to be willing to experiment and also be willing to fail.”
“We learn a lot more from our mistakes in investing than we learn in the winners,” he said. “But if you keep the experimentation and don’t view failure as anything other than just a bad outcome, you learn — and you do something different next time.”
Comments from Examiner Readers
2:11 AM MST on Sat., Sep. 13, 2008 re: "Power Profile: David Baldacci"
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wcpgytl hgejmfcu said:
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5 agree | 1 disagree
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Examiner Reader said:
Ed Crane doesn't "support government recognition of gay marriage," rather, he believes government should not tell people who they can and cannot marry. Liberty means you should have the right to enter into a contract with another person, provided the contract doe not harm others. This includes gay marriage.
142 agree | 117 disagree
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Examiner Reader said:
'Government coercion against those with strong moral convictions against [gay marriage]'? I think it's the other way around: the government has been using coercion to enforce a particular brand of moral conviction on everyone, even though gay marriage doesn't harm anyone. Where's the idea of liberty in that?
148 agree | 124 disagree
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Examiner Reader said:
Reading about Ed Crane's views confirms what I've long suspected; there's more 'liberal' than 'liberty' in the Libertarian Movement. He supports government recognition of gay marriage, which implies government coercion against those with strong moral convictions against it.
125 agree | 136 disagree
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Examiner Reader Madison, Wisconsin said:
An interesting interview.....it gave us a clearer picture of the man behind the new Sidney Harman Center for the Performing Arts. We'll check it out next time we're in Washington, D.C.
286 agree | 241 disagree
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